Human Medications, Human Drugs, Animal Medications, Animal Drugs, Pharmacy law, Pharmaceutical law, Compounding law, Sterile and Non Sterile Compounding 797 Compliance, Veterinary law, Veterinary
Compounding Law; Health Care; Awareness of all Types of Compounding Issues;
Pharmacy Benefit Managers (PBMs), Outsourcing Facilities
Food and Drug Administration and Compliance Issues
Sunday, January 31, 2021
Department of Justice
U.S. Attorney’s Office
Middle District of Florida
FOR IMMEDIATE RELEASE
Wednesday, January 27, 2021
United States Files False Claims Act Complaint Alleging Compounding Pharmacy Kickback Scheme
United States Attorney Maria Chapa Lopez announces that the government has filed a civil lawsuit against Mihir Taneja alleging that Taneja conspired with Larry Smith, the owner of Z Stat Medical, LLC d/b/a Oldsmar Pharmacy, to enter into a kickback arrangement with a marketing company (Centurion Compounding, Inc.), which led to millions of dollars in TRICARE reimbursement for compounding prescriptions. Specifically, the lawsuit alleges that Taneja and Smith negotiated an arrangement with Centurion in which Centurion was paid a percentage of profits from TRICARE claims that Centurion referred to Oldsmar Pharmacy. As a result, from November 2014 to February 2015, Oldsmar Pharmacy submitted thousands of claims for reimbursement to TRICARE for compounded drugs that were tainted by kickbacks and, therefore, were false.
The actions of Taneja and his co-conspirators contributed to a larger fraud trend against TRICARE involving compounded prescriptions. TRICARE’s costs for compounded drugs skyrocketed during this period, rising from $5 million in 2004 to $514 million in 2014, before reaching a high water mark of $1.75 billion in fiscal year 2015. To date, the U.S. Attorney’s Office for the Middle District of Florida has diligently pursued fraud associated with compounding pharmacy claims, resulting in over $50 million in recoveries.
“Kickback arrangements skew the judgment of medical providers and threaten the integrity and viability of our healthcare programs,” said U.S. Attorney Chapa Lopez. “The TRICARE program has been particularly vulnerable to these schemes in recent years. We will use every remedy at our disposal, including the civil False Claims Act, to eradicate this kind of fraud from our district.”
The lawsuit is filed under the False Claims Act, which makes a person liable to the United States if he presents, or causes another to present, false or fraudulent claims for payments. The Anti-Kickback Statute prohibits anyone from offering or paying remuneration in order to induce or reward referrals for services paid for under federal healthcare systems.
The case is captioned United States v. Mihir Taneja, Case No. 8:21-cv-102-T-24AEP. The claims asserted by the government are allegations only, and there has been no determination of liability. The United States previously filed suit against Smith and Oldsmar Pharmacy arising out of the same conduct. That case is captioned U.S. ex rel. Silva, et al. v. Z Stat Medical, LLC, et al., No. 8:15-cv-00444-T-33TGW (M.D. Fla.).
The government’s complaint in this action illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477).
The case is being handled by Assistant U.S. Attorney Michael R. Kenneth of the U.S. Attorney’s Office for the Middle District of Florida, with assistance of the Department of Defense Office of Inspector General.